Kolhapur civic body seeks state's opinion on property tax hike issue

KOLHAPUR: The municipal corporation has sought the state government's advice on the propertytax hike issue. The general body meeting of the Kolhapur Municipal Corporation has already rejected the proposal to increase tax, however, the administration is seeking the urban development department's (UDD) advice on the issue.

Sources in the KMC said that commissioner P Siva Sankar has written a letter, along with the rejected resolution, to the UDD asking officials whether tax can be increased considering the present financial situation. The letter and the resolution was submitted to UDD on Wednesday. The UDD can revoke the decision of the municipal corporation as per requirement, said sources.

Commissioner Sankar was not available for comment. Earlier, he had told TOI that it is difficult for the civic body to function effectively without the property tax hike. "Once the rejected resolution comes back to me, I can take it to the UDD for further clarification," he had said.

On February 20, the general body meeting of the KMC had rejected the resolution tabled by the administration to increase property tax. The decision to seek the UDD's intervention could create a conflict between elected representatives and the administration as mayor Ashwini Ramane made clear that the house will not allow any hike.

Property tax has not been increased since March 2011, when the civic body decided to adopt the ready reckoner based taxation system. The system was accepted to obtain Rs108 crore under the state government's Nagarotthan road development project. The government had asked the civic body to present its sustainable revenue sources to get grants and loans from financial institutions.

Ramane said that the hike could reach 40% and many property owners in the city would suffer an excessive financial burden. "Citizens are already reeling under inflation. We cannot ask them to pay more taxes; that is why we rejected the earlier proposal. If the administration tries to table the proposal again, we will reject it," she said.

The proposal had suggested an increase in the tax based on ready reckoner rates. The rates were to be increased by 10% every year from 2011 to 2015. This way, the total property tax is expected to increase by 40% and that is not acceptable. We will ensure that tax is charged on the basis of 2011 rates," said Ramane.

KMC has limited revenue sources and property tax is one of the key sources of funds for the civic body. At present, the municipal corporation earns more than Rs40 crore from property tax.

Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.